NZBA member banks commit to set science-based, 1.5-degree aligned targets for their financed emissions within 18 months of becoming a member of the Alliance. They commit to setting further targets covering a significant majority of their financed emissions within 36 months of joining. All targets are set independently and on a voluntary basis in accordance with each member’s individual goals.
At these 18-month and 36-month milestones, NZBA reviews whether member banks’ public targets and disclosures align with criteria described in the NZBA Commitment Statement and Guidelines for Climate Target Setting for Banks. The review does not constitute assurance and banks are encouraged to obtain assurance from appropriate third parties.
When a bank sets targets that align with the criteria, NZBA posts a link to the member’s public disclosures of its target on the members page of the NZBA website. When a bank partly aligns with the criteria, NZBA gives written feedback regarding the improvements needed for the next reporting period and posts a link to its public target disclosures on the NZBA members page.
If a bank does not immediately align with the criteria, the Secretariat initiates the following accountability mechanism.
When a bank does not set targets aligning with NZBA criteria when initially due
If a bank does not set targets aligning with NZBA criteria in time for its original 18-month or 36-month milestones, it must submit a formal request for an extension, signed by a senior-level executive, outlining a timeline, milestones and associated actions. This request is reviewed by the NZBA Steering Group which takes the decision as to accept or reject the extension.
If the extension period is approved, the words ‘awaiting targets’ are displayed on the member listing on the website. If a bank does not receive such approval, the Steering Group may decide to remove a member from the list of active signatories on the NZBA member listing page.
When a bank does not set targets aligning with NZBA criteria within its agreed extension period
If a bank does not set valid targets within its approved extended timeline, NZBA engages with the bank to understand the reasons.
If the NZBA Steering Group concludes that the bank will not be able to meet NZBA criteria in the near term, but reasonably expects the bank to be willing and able to do so later, it can decide to declare the bank an “inactive” signatory for a maximum of 6 months. In this case, a bank would remain on the list of signatories with the word ‘inactive’ displayed on the member listing.
At the end of the inactive period, NZBA will liaise with the member and the NZBA Steering Group wil decide to either: 1) Reinstate a bank to active membership; or, 2) Remove its name from the NZBA member listing page.
The length of extensions to target-setting deadlines
- Extensions of up to six months beyond the 18- and 36-month milestones can be approved directly by the NZBA Secretariat and the NZBA Steering Group is informed.
- Extensions of more than six months beyond the 18- and 36-month milestones must be approved by the NZBA Steering Group.
- Extensions should generally not exceed 12 months. However, a flexible approach can be taken at the discretion of the Steering Group.
- For NZBA member banks which are also signatories of the Principles of Responsible Banking (PRB), extension lengths will be considered in the context of the next PRB reporting cycles.
- Extensions at the 18-month milestone do not alter the 36-month timeline. A bank may request a further extension if there is evidence of progress, and the timeline is reasonable.
Once removed from the list of signatories, a bank can only re-join the Alliance when it fully meets NZBA criteria. Re-joining NZBA does not reset its target-setting timeline.